Homeowners can save a lot of money by being very sensible with financial matters surrounding their own home. You can potentially save hundreds of euros per month on mortgage costs. In addition, owning your own home can also be a nice addition to your pension. House prices have fluctuated over the years, but on average prices continue to rise. There is a shortage of housing in the Netherlands, which means prices are high. House prices may fall due to economic conditions, but as long as a shortage remains, buying a house will probably remain a wise investment in the future. The alternative is to rent a house, but the rent will increase annually and you will not be able to benefit from rising property prices. By being smart with your own home, you can often save extra money.
Investing is for the long term
When buying a home, you not only incur the cost of the home itself, but the additional costs greatly increase the overall cost. When buying an existing home, you must take into account approximately ten percent in additional costs. The biggest contributor to these costs is the transfer tax of six percent of the sales value. The notary’s costs also increase the costs by a few thousand euros. Buying a house and selling it again after a few years is often unfavorable. If the sales value has increased a few percent per year, you will still cover the costs of selling within a few years. You should actually own a house for more than ten years.
Save on mortgage interest
The monthly costs are largely determined by the mortgage interest rate. In periods with very low interest rates, banks advise to fix the interest rate for a longer period. A difference of a few tenths of a percent makes a big difference in the monthly mortgage costs. On a mortgage of 200,000, an interest difference of 0.5 percent gives a difference in monthly costs of 83.33 gross. The mortgage interest is deductible, so the net difference will be lower. By shopping around when taking out a mortgage you can save a lot of money for a period of up to thirty years. However, you should not always go for the lowest interest rate. In all cases you should be well informed by preferably three different advisors. This way you will avoid spending too much money in the coming years.
Object to the WOZ value
The municipality will appraise your house annually to determine the WOZ value. A lower appraisal can save you a lot of money every year. If the municipality’s valuation is too high, you have the option to object. You can indicate in writing within six weeks that you do not agree with the valuation.
Make additional repayments
Mortgage interest paid is tax deductible. However, in some cases it may be possible to make additional repayments. The extent to which this can be achieved depends on the level of the mortgage interest rate. If you have to pay a high percentage and you receive a low interest rate on your savings, it is possible to use the money to make additional repayments. On the other hand, you should not make such a decision based on a small difference in percentage. As soon as savings interest rates start to rise again, it may be wiser to save money instead of paying off your mortgage.